Problem 08-40 Part e (Algo) e. Suppose the corporation assumed a mortgage of $660,000 attached to the building and land. The fair market value of the building is $350,000 and the fair market value of the land is $742,000. The fair market value of the stock remains $460,000. How much, if any, gain or loss does Zhang recognize on the exchange assuming the revised facts?
Problem 08-40 Part e (Algo) e. Suppose the corporation assumed a mortgage of $660,000 attached to the building and land. The fair market value of the building is $350,000 and the fair market value of the land is $742,000. The fair market value of the stock remains $460,000. How much, if any, gain or loss does Zhang recognize on the exchange assuming the revised facts?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Dhapa
![Problem 08-40 (LO 08-2) (Algo)
[The following information applies to the questions displayed below.]
Zhang incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in return for
100 percent of the corporation's stock. The property transferred to the corporation had the following fair market values
and adjusted tax bases:
Inventory
Building
Land
Total
FMV
$ 28,000
210,000
322,000
Adjusted Tax
Basis
$ 14,000
140,000
420,000
$ 560,000
$ 574,000
The corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value of the
corporation's stock received in the exchange was $460,000.
Note: Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.
Problem 08-40 Part e (Algo)
e. Suppose the corporation assumed a mortgage of $660,000 attached to the building and land. The fair market value of the building
is $350,000 and the fair market value of the land is $742,000. The fair market value of the stock remains $460,000.
How much, if any, gain or loss does Zhang recognize on the exchange assuming the revised facts?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2ef0baab-906f-46a5-aed0-be4998ed6bd8%2F8485a042-5f6c-4ccc-8474-8b754ba11095%2Fh32ohx7_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 08-40 (LO 08-2) (Algo)
[The following information applies to the questions displayed below.]
Zhang incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in return for
100 percent of the corporation's stock. The property transferred to the corporation had the following fair market values
and adjusted tax bases:
Inventory
Building
Land
Total
FMV
$ 28,000
210,000
322,000
Adjusted Tax
Basis
$ 14,000
140,000
420,000
$ 560,000
$ 574,000
The corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value of the
corporation's stock received in the exchange was $460,000.
Note: Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.
Problem 08-40 Part e (Algo)
e. Suppose the corporation assumed a mortgage of $660,000 attached to the building and land. The fair market value of the building
is $350,000 and the fair market value of the land is $742,000. The fair market value of the stock remains $460,000.
How much, if any, gain or loss does Zhang recognize on the exchange assuming the revised facts?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education